Enforcement of Contracts

The court system of Albania consists of trial courts, courts of appeal and the Supreme Court. Trial courts hear a variety of cases in the first instance (civil, commercial, criminal and administrative). There are 6 Courts of Appeal of general jurisdiction that hear appeals against the decisions of the trial courts and sit in panels consisting of three judges. Albanian courts do not enjoy high levels of public confidence, especially in the business community. Uncertainty about the ability of creditors to enforce their legal rights contributes to a more cautious approach to lending. Debtors are perceived not to fear legal action by creditors, affecting the rate of non-performing loans. Several factors underpin concerns about judicial performance in the area of commercial law.

Judicial expertise in commercial law areas is considered to be limited. Until recently, judges received little training in business-related topics. Also, Corruption remains a concern in the country and the judiciary is often suspected of taking bribes. Judicial proceedings are typically protracted, and there is a substantial backlog of cases which are more than three years old. Civil cases involving property disputes, which are large in number, are particularly affected by delay. In 2011, a new law was adopted on mediation in conflict resolution. This is expected to contribute to a reduction in the backlog of cases and enhance the speed of justice in the Albanian courts. Finally, improvement of the judicial system is one of the key requirements established by the EU for Accession, a fact which continues to drive local interest in judicial reform. The importance of Judiciary Reform in accession negotiations was underscored in the most recent EU Progress Report.